Closing Agent Admits Participating in Large-Scale Mortgage Fraud Scheme
|U.S. Attorney’s Office August 08, 2013|
NEWARK, NJ—A paralegal today admitted participating in a long-running, large-scale mortgage fraud scheme that defrauded financial institutions of at least $2 million, U.S. Attorney Paul J. Fishman announced.
Linda Cohen, 55, of Orange, New Jersey, pleaded guilty before U.S. District Judge Esther Salas to an information charging her with one count of conspiring to commit bank fraud and one count of transacting in criminal proceeds.
According to documents filed in this case and statements made in court:
Cohen worked as a paralegal who handled real estate closing for S.B., an attorney licensed in New Jersey. Cohen acted as the settlement agent for fraudulent mortgage loans brokered by conspirator Klary Arcentales, 45, of Lyndhurst, New Jersey, on behalf of Premier Mortgage Services. As closing agent, Cohen furthered the scheme by convening closings, receiving funds from lenders, and preparing HUD-1 reports that purported to reflect the sources and destinations of funds for mortgages on subject properties. Those HUD-1s were neither true nor accurate. Cohen routinely certified HUD-1s in which she purported to have received a down payment from the buyer when no down payment had been made. At or following the closings, Cohen disbursed mortgage loan proceeds directly to Premier Mortgage Services, Arcentales, and other conspirators. Cohen created shell bank accounts into which she funneled the proceeds of her fraudulent activity.
The count of conspiracy to commit bank fraud to which Cohen pleaded guilty is punishable by a maximum potential penalty of 30 years in prison and a $1 million fine, and the count of transacting in criminal proceeds is punishable by a maximum penalty of 10 years in prison and a fine of $250,000 or twice the gross amount of any gain or loss. Sentencing is scheduled for November 18, 2013.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford; and special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen, for the investigation leading to today’s guilty plea. He also thanked the Social Security Administration-Office of Inspector General, under the direction of Special Agent in Charge Edward Ryan, for its role in the investigation.
The government is represented by Assistant U.S. Attorneys Zach Intrater and Rahul Agarwal of the Newark office.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions, and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.stopfraud.gov.
Defense counsel: Brian Daly Esq., Middletown, N.J.